Insurance Co. of North America v. United States

• Decision Date: 12 March 1948
• Docket Number: Civ. A. No. 272.
• Citation: 76 F. Supp. 951
• Court: U.S. District Court — Eastern District of Virginia
• Parties: INSURANCE CO. OF NORTH AMERICA v. UNITED STATES.

76 F. Supp. 951

INSURANCE CO. OF NORTH AMERICA v. UNITED STATES.

Civ. A. No. 272.

District Court, E. D. Virginia, Alexandria Division.

March 12, 1948.

Leroy S. Bendheim, of Alexandria, Va., and Abner H. Ferguson, of Washington, D. C. (Arthur W. Clement, of New York City, on the brief), for plaintiff.

George R. Humrickhouse, U. S. Atty., of Richmond, Va. (J. H. Reddy, Dept. of Justice, of Washington, D. C., on the brief), for defendant.

BRYAN, District Judge.

The question is whether an insurance company may as subrogee sue the United States under the Federal Tort Claims Act, 28 U.S.C.A. ß 931, to recover the amount paid by the insurer to its insured as the damages suffered by the latter in consequence of the negligent act or omission of an employee of the United States.

The issue is made by the motion of the United States to dismiss the complaint of the Insurance Company of North America to recover the amount it has paid to its insured for the loss sustained when his personal property was damaged through the negligence of the defendant's employee.

Defendant takes the position that the Act does not permit suit by a subrogee, contending that a subrogee is not a claimant within the meaning of the statute because its claim is not "on account of damage to or loss of property or on account of personal injury or death." The United States urge that the law never contemplated a waiver of their immunity against suit in favor of anyone save the individual whose person or property was insured. Further defense is that action of the present type is barred by the federal statute condemning transfers and assignments of claims against the United States. 31 U.S.C.A. ß 203.

The Court is of the opinion that a subrogee is entitled to the benefits of the Federal Tort Claims Act.

Well established and readily admitted is the rule that statutes waiving the immunity of the United States must be strictly construed. But just as impelling is the duty of the Court to follow the intent of the Congress to make the United States fully liable to suit, and to accord every citizen, whether person, firm or corporation, such right of action, when an enactment of the Congress is clear and unequivocal in its purpose to waive the sovereign immunity.

A clearer or more sweeping waiver of immunity than that contained in sec. 410 of the Act, 28 U.S.C.A. ß 931, is not easily phrased. Jurisdiction is granted "on any claim against the United States * * * under circumstances where the United States, if a private person, would be liable to the claimant for such damage * * * in accordance with the law of the place where the act or omission occurred," and further "the United States shall be liable in respect of such claims, to the same claimants, in the same manner, and to the same extent, as a private individual under like circumstances * * *". That can mean here no less than it says ‚Äî that the United States may be sued for torts of negligence whenever an individual in Virginia might be sued. So bald is this declaration of suability that no ground for construction seems available. No intimation arises to outlaw a subrogee and concededly Virginia would allow him to sue.

The United States finds his exclusion in the words "on account of damage to or loss of property", which appear in the statute as qualifying "any claim". An insurersubrogee, they say, is not a claimant "on account of damage to or loss of property". But the Congress has said "the United States shall be liable in respect of such claims, to the same claimants, in the same manner, and to the same extent, as a private individual under like circumstances". That clause is a repetition of the liability to suit stated in the first sentence of the section; it is emphasis of the wish of the Congress to expose the United States to suit in every phase of negligence liability to which an individual is subject. Indisputably an individual is answerable at law to a subrogee.

Moreover, the subrogee's claim in fact is a claim "on account of damage to or loss of property". Equitable subrogation is the enforcement of the original claim. It is not a separate claim; it is still the injured person's claim although enforced by another. United States v. American Tobacco Co., 166 U. S. 468, 474, 17 S.Ct. 619, 41 L.Ed. 1081.

The Government suggests that the Congress had in mind "private individuals" and not insurance companies as claimants. This view would deny the remedy to the subrogee if a corporation, but if the insurer happened to be an individual, or a partnership, or an unincorporated association of individuals, then it would hold suit available to a subrogee. Such interpretation is not impressive.

Doubtlessly the Congress was well aware of the prevalence of liability insurance. Had it desired to forbid subrogated insurers as claimants, it would have said so. The omission of such an exception is positive evidence that none was intended. An entire section, sec. 421, 28 U.S.C.A. ß 943, is devoted to the enumeration of exceptions. Subrogees are not mentioned in that section, even though the attention of the House Claims Committee was directed to the point by the Assistant Attorney General of the United States, as appears from the Government's memorandum. The Congress did not intend for the circumstance of insurance to determine immunity or liability to suit. Nothing appears in the Act to justify the conclusion that the United States were to be liable only when the injured or damaged person was uninsured.

If the view of the Government is to prevail, the effect could easily and legitimately be avoided, either by the insurer's stipulation that the insured sue the United States as a prerequisite to recovery against the insurer, or by resorting to the method,...